A leading provider of global energy transportation services, OSG owns and operates a fleet of U.S. Flag vessels that transport crude oil and refined petroleum products.

Our modern, well maintained fleet and commitment to high quality, incident-free service positions us as a preferred cargo carrier of major oil and gas companies, refiners and traders throughout the world.

Operating one of the safest, cleanest and most reliable fleets in the industry is the bedrock on which OSG was founded.

Press Release

Overseas Shipholding Group Reports Fourth Quarter and Full Year 2016 Results

Company Release - 3/7/2017 7:00 AM ET

TAMPA, Fla.--(BUSINESS WIRE)--
Overseas Shipholding Group, Inc. (NYSE:OSG) (the “Company” or “OSG”) a
provider of energy transportation services for crude oil and petroleum
products in the U.S. Flag markets, today reported results for the fourth
quarter and full year 2016.

Highlights

Successfully completed the spin-off of its international business,
International Seaways, Inc. (NYSE:INSW) on November 30, 2016. As a
result, all results in this release reflect only continuing operations
unless otherwise noted, and reflect the results of International
Seaways as discontinued operations.

Time charter equivalent (TCE) revenues(A) for the fourth
quarter and full year 2016 were $109.6 million and $446.2 million,
down 4% and 1%, respectively, compared with the same periods in 2015.

Net income from continuing operations for the fourth quarter was $64.7
million, or $0.74 per diluted share, compared with a net loss of $34.2
million, or $0.35 per diluted share for the fourth quarter 2015.

Net loss from continuing operations for the full year 2016 was $1.1
million, or $0.01 per diluted share, compared with net income of $80.6
million, or $0.83 per diluted share for the full year 2015.

Fourth quarter and full year 2016 Adjusted EBITDA(B) was
$49.9 million and $176.2 million, up 6% and 5%, respectively, from
$47.2 million and $168.1 million in the same periods in 2015.

Total cash(C) was $206.9 million as of December 31, 2016.

Accelerated the payment of $19.0 million in principal amount of term
loan in the fourth quarter.

First quarter 2017, received a final decree and order approving a
motion to close its bankruptcy case.

“We are pleased with our performance for the fourth quarter and full
year 2016 despite challenging market conditions throughout most of the
year,” said Sam Norton, OSG’s president and CEO. “We also successfully
executed on our strategic goal of streamlining our operating structure
and enhancing our focus by completing the spin-off of International
Seaways.”

Mr. Norton continued, “Going forward, OSG will be a diversified U.S.
Flag shipping company with a trusted operating franchise and a leading
portfolio in the Jones Act market. Our unique position as the only
operator of shuttle tankers in the U.S. Gulf Coast, the only licensed
operator of lightering vessels in the Delaware Bay, and the only
operator of tankers in the Maritime Security Program (“MSP”) helps
provide stability against market volatility. We are well-positioned to
build on the Company’s strengths, address future growth opportunities
and drive shareholder value.”

Fourth Quarter 2016 Results

TCE revenues for the fourth quarter of 2016 were $109.6 million, a
decrease of $5.0 million, or 4%, compared with the fourth quarter of
2015, primarily due to lower average daily rates earned, which accounted
for a $9.4 million decrease in TCE revenues. This decrease was partially
offset by a $2.9 million increase in Delaware Bay lightering revenues
and a 52-day increase in revenue days for its Jones Act fleet, excluding
its modern lightering ATBs, driven by fewer drydock and repair days
resulting in a $1.5 million increase in TCE revenues. Shipping revenues
were $114.8 million for the quarter, down 3% compared with the fourth
quarter of 2015.

Operating income for the fourth quarter of 2016 was $11.5 million,
compared to operating income of $20.9 million in the fourth quarter of
2015. The decrease reflects the impact of vessel impairment charges on
one of the rebuilt ATBs and the decline in TCE revenues.

Net loss for the fourth quarter was $275.5 million, compared with net
income of $9.3 million for the fourth quarter 2015. Net income from
continuing operations for the fourth quarter was $64.7 million, or $0.74
per diluted share, compared with a net loss from continuing operations
of $34.2 million, or $0.35 per diluted share for the fourth quarter
2015. The increase reflects the reversal of the deferred tax liability
on the unremitted earnings of INSW in the current quarter compared with
a provision in the fourth quarter of 2015, reductions in interest
expense due to the Company’s significant debt reductions in the fourth
quarter of 2015 and in 2016, partially offset by the vessel impairment
recognized in the current quarter. In addition, net loss from continuing
operations in the comparative fourth quarter 2015 period included $27.6
million in bond premium and consent fees and related professional fees
paid on notes repurchased.

Adjusted EBITDA was $49.9 million for the quarter, an increase of $2.7
million compared with the fourth quarter of 2015, driven primarily by
lower general and administrative expenses, partially offset by the
decline in TCE revenues.

Full Year 2016 Results

TCE revenues for the full year 2016 were $446.2 million, a decrease of
$2.9 million, or 1%, compared with the full year 2015, primarily due to
lower average daily rates earned by its Jones Act fleet, which accounted
for a $16.2 million decrease in TCE revenues. This decrease was largely
offset by a 266-day increase in revenue days for its Jones Act fleet,
excluding its modern lightering ATBs, driven by fewer drydock and repair
days resulting in a $11.2 million increase in TCE revenues. Also,
contributing to the offset was a $1.2 million increase in Delaware Bay
lightering revenues and increased average daily rates by its MSP
vessels, which accounted for a $0.9 million increase. Shipping revenues
were $462.4 million for the full year 2016, down 1% compared with the
full year 2015.

Operating loss for the full year 2016 was $31.5 million, compared to
operating income of $84.2 million for the full year 2015.

Net loss for the full year 2016 was $293.6 million, compared with net
income of $284.0 million for the full year 2015. Net loss from
continuing operations for the full year 2016 was $1.1 million, or $0.01
per diluted share, compared with net income of $80.6 million, or $0.83
per diluted share for the full year 2015. The decrease reflects vessel
impairments recognized in the second half of 2016, partially offset by
the benefit from the reversal of the deferred tax liability on the
unremitted earnings of INSW compared with a provision in 2015, and
reductions in interest expense due to the Company’s significant debt
reductions in the second half of 2015 and in 2016. In addition, net
income from continuing operations in the comparative full year 2015
period included a one-time, non-cash income tax benefit of $150.1
million and $29.6 million in bond premium and consent fees and related
professional fees paid on notes repurchased.

Adjusted EBITDA was $176.2 million for the full year 2016, an increase
of $8.1 million compared with the full year 2015, driven primarily by
lower general and administrative expenses, partially offset by the
decline in TCE revenues.

Discontinued Operations

As noted above, OSG completed the separation of its business into two
independent publicly-traded companies through the spin-off of its then
wholly-owned subsidiary INSW on November 30, 2016. The spin-off
separated OSG and INSW into two distinct businesses with separate
management. OSG retained the U.S. Flag business and INSW holds entities
and other assets and liabilities that formed OSG’s former International
Flag business. The spin-off transaction was in the form of a pro rata
distribution of INSW’s common stock to our stockholders and warrant
holders of record as of the close of business on November 18, 2016.

In accordance with Accounting Standards Update (“ASU”) 2014-08, Reporting
Discontinued Operations and Disclosures of Disposals of Components of an
Entity, the assets and liabilities and results of operations of INSW
are reported as discontinued operations for all periods presented.

Net loss from discontinued operations for the fourth quarter was $340.2
million, or $3.89 per diluted share, compared with net income from
discontinued operations of $43.5 million, or $0.45 per diluted share for
the fourth quarter 2015. Net loss from discontinued operations for the
full year 2016 was $292.6 million, or $3.24 per diluted share, compared
with net income of $203.4 million, or $2.10 per diluted share for the
full year 2015. Results from discontinued operations for the fourth
quarter and full year 2016 reflect a charge of $332.6 million to reduce
the carrying value of the INSW disposal group to its estimated fair
value, calculated on a held for sale basis.

Conference Call

The Company will host a conference call to discuss its fourth quarter
and full year 2016 results at 9:00 a.m. Eastern Time (“ET”) on Tuesday,
March 7, 2017.

To access the call, participants should dial (888) 317-6016 for domestic
callers and (412) 317-6016 for international callers. Please dial in ten
minutes prior to the start of the call.

A live webcast of the conference call will be available from the
Investor Relations section of the Company’s website at http://www.osg.com/.

An audio replay of the conference call will be available starting at
11:00 a.m. ET on Tuesday, March 7, 2017 through 10:59 p.m. ET on
Tuesday, March 14, 2017 by dialing (877) 344-7529 for domestic callers
and (412) 317-0088 for international callers, and entering Access Code
10101778.

About Overseas Shipholding Group, Inc.

Overseas Shipholding Group, Inc. (NYSE:OSG) is a publicly traded tanker
company providing energy transportation services for crude oil and
petroleum products in the U.S. Flag markets. OSG is a major operator of
tankers and ATBs in the Jones Act industry. OSG’s 24-vessel U.S. Flag
fleet consists of eight ATBs, two lightering ATBs, three shuttle
tankers, nine MR tankers, and two non-Jones Act MR tankers that
participate in the U.S. MSP. OSG is committed to setting high standards
of excellence for its quality, safety and environmental programs. OSG is
recognized as one of the world’s most customer-focused marine
transportation companies and is headquartered in Tampa, FL. More
information is available at www.osg.com.

Forward-Looking Statements

This release contains forward-looking statements. In addition, the
Company may make or approve certain statements in future filings with
the Securities and Exchange Commission (SEC), in press releases, or in
oral or written presentations by representatives of the Company. All
statements other than statements of historical facts should be
considered forward-looking statements. These matters or statements may
relate to the Company’s prospects, its ability to retain and effectively
integrate new members of management and the effect of the Company’s
spin-off of International Seaways, Inc. Forward-looking statements are
based the Company’s current plans, estimates and projections, and are
subject to change based on a number of factors. Investors should
carefully consider the risk factors outlined in more detail in the
Annual Report on Form 10-K for OSG and in similar sections of other
filings made by the Company with the SEC from time to time. The Company
assumes no obligation to update or revise any forward-looking
statements. Forward-looking statements and written and oral forward
looking statements attributable to the Company or its representatives
after the date of this release are qualified in their entirety by the
cautionary statements contained in this paragraph and in other reports
previously or hereafter filed by the Company with the SEC.

A, B, CReconciliations of these non-GAAP financial
measures are included in the financial tables attached to this press
release.

Consolidated Statements of Operations($ in
thousands, except per share amounts)

Three Months Ended December 31,

Fiscal Year Ended December 31,

2016

2015

2016

2015

(unaudited)

(unaudited)

Shipping Revenues:

Time and bareboat charter revenues

85,539

96,644

372,149

385,206

Voyage charter revenues

29,237

22,110

90,271

81,666

Total Shipping Revenues

114,776

118,754

462,420

466,872

Operating Expenses:

Voyage expenses

5,219

4,194

16,260

17,814

Vessel expenses

33,343

34,757

140,696

138,179

Charter hire expenses

23,138

23,293

91,947

91,875

Depreciation and amortization

20,862

22,991

89,563

76,851

General and administrative

7,013

16,335

41,608

61,540

Severance costs

10,758

(5

)

12,996

-

Loss on disposal of vessels and other property, including impairments

6,623

61

104,532

207

Total Operating Expenses

106,956

101,626

497,602

386,466

Income/(Loss) from vessel operations

7,821

17,128

(35,182

)

80,406

Equity in income of affiliated companies

3,656

3,789

3,642

3,783

Operating income/(Loss)

11,476

20,917

(31,540

)

84,189

Other Expense

(295

)

(24,333

)

(2,391

)

(26,239

)

Income/(Loss) before interest expense, reorganization items and

income taxes

11,181

(3,416

)

(33,931

)

57,950

Interest expense

(9,765

)

(15,709

)

(43,151

)

(70,365

)

Income/(loss) before reorganization items and income taxes

1,416

(19,125

)

(77,082

)

(12,415

)

Reorganization items, net

(393

)

(1,708

)

10,925

(8,052

)

Income/(loss) from Continuing Operations before income taxes

1,023

(20,833

)

(66,157

)

(20,467

)

Income tax benefit/(provision) from Continuing Operations

63,653

(13,402

)

65,098

101,032

Net Income/(Loss) from Continuing Operations

64,678

(34,235

)

(1,059

)

80,565

Net Income/(loss) from Discontinued Operations

(340,153

)

43,502

(292,555

)

203,395

Net Income/(Loss)

$(275,475

)

$9,267

$(293,614

)

$283,960

Weighted Average Number of Common Shares Outstanding:

Basic - Class A

87,497,273

95,599,213

90,949,577

95,584,559

Diluted - Class A

87,721,704

95,599,213

90,949,577

95,629,090

Basic and Diluted - Class B

-

1,319,973

533,758

1,320,337

Per Share Amounts from Continuing Operations:

Basic and diluted net income/(loss) – Class A

$0.74

$(0.35

)

$(0.01

)

$0.83

Basic and diluted net income/(loss) – Class B

-

$(0.35

)

$(0.11

)

$0.83

Per Share Amounts from Discontinued Operations:

Basic and diluted net income/(loss) – Class A

$(3.89

)

$0.45

$(3.24

)

$2.10

Basic and diluted net income/(loss) – Class B

-

$0.45

$4.54

$2.10

On June 2, 2016 the Board approved the Reverse Split Amendment to the
Company’s Amended and Restated Certificate of Incorporation. The Reverse
Split Amendment effected the Reverse Split. The Reverse Split Amendment
became effective on June 13, 2016. In accordance with Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) ASC 260, Earnings Per Share, the Company adjusted the
computations of basic and diluted earnings per share retroactively for
all periods presented to reflect that change in its capital structure.

Consolidated Balance Sheets($ in thousands)

December 31,

December 31,

2016

2015

ASSETS

Current Assets:

Cash and cash equivalents

$

191,089

$

193,978

Restricted cash

7,272

10,583

Voyage receivables

23,456

6,662

Income tax recoverable

877

1,200

Receivable from INSW

683

-

Other receivables

2,696

3,195

Inventories, prepaid expenses and other current assets

12,243

11,615

Current assets of discontinued operations

-

396,698

Total Current Assets

238,316

623,931

Restricted cash

8,572

-

Vessels and other property, less accumulated depreciation

684,468

844,447

Deferred drydock expenditures, net

31,172

58,166

Total Vessels, Deferred Drydock and Other Property

715,640

902,613

Investments in and advances to affiliated companies

3,694

3,827

Intangible assets, less accumulated amortization

45,617

50,217

Other assets

18,658

16,608

Non-current assets of discontinued operations

-

1,633,214

Total Assets

$

1,030,497

$

3,230,410

LIABILITIES AND EQUITY

Current Liabilities:

Accounts payable, accrued expenses and other current liabilities

$

57,222

$

60,450

Income taxes payable

306

50

Current installments of long-term debt

-

56,755

Current liabilities of discontinued operations

-

37,030

Total Current Liabilities

57,528

154,285

Reserve for uncertain tax positions

3,129

2,520

Long-term debt

525,082

634,286

Deferred income taxes

141,457

208,195

Other liabilities

48,969

52,889

Non-current liabilities of discontinued operations

-

597,747

Total Liabilities

776,165

1,649,922

Commitments and contingencies

Equity:

Total Equity

254,332

1,580,488

Total Liabilities and Equity

$

1,030,497

$

3,230,410

Consolidated Statements of Cash Flows ($ in
thousands)

Fiscal Year Ended December 31,

2016

2015

Cash Flows from Operating Activities:

Net income/(loss)

$ (293,614

)

$ 283,960

Less: Net income/(loss) from discontinued operations

(295,555

)

203,395

Net income/(loss) from continuing operations

(1,059

)

80,565

Items included in net income/(loss) from continuing operations not
affecting cash flows:

Items included in net income/(loss) related to investing and
financing activities:

Discount on repurchase of debt

(3,415

)

-

Loss on disposal of vessels and other property – net

127

207

Distributions from INSW

202,000

200,000

Payments for drydocking

(6,844

)

(41,323

)

Bankruptcy and IRS claim payments

(7,136

)

(8,343

)

Deferred financing costs paid for loan modification

-

(4,220

)

Changes in other operating assets and liabilities

(2,431

)

31,314

Net cash provided by operating activities

328,860

276,333

Cash Flows from Investing Activities:

Change in restricted cash

(5,261

)

42,502

Expenditures for vessels and vessel improvements

-

(53

)

Expenditures for other property

(666

)

(75

)

Other – net

-

(1

)

Net cash provided by/(used in) investing activities

(5,927

)

42,373

Cash Flows from Financing Activities:

Cash dividends paid

(31,910

)

-

Payments on debt

(54,345

)

(6,030

)

Extinguishment of debt

(120,224

)

(326,051

)

Repurchases of common stock and common stock warrants

(119,343

)

(3,633

)

Net cash used in financing activities

(325,822

)

(335,714

)

Net decrease in cash and cash equivalents

(2,889

)

(17,008

)

Cash and cash equivalents at beginning of year

193,978

210,986

Cash and cash equivalents at end of period

$191,089

$193,978

Cash flows from discontinued operations:

Cash flows provided by operating activities

$111,768

$222,739

Cash flows provided by investing activities

25,202

114,163

Cash flows used in financing activities

(355,687

)

(206,284

)

Net (decrease)/increase in cash and cash equivalents from

discontinued operations

$(218,717

)

$130,618

Spot and Fixed TCE Rates Achieved and Revenue Days

The following tables provides a breakdown of TCE rates achieved for spot
and fixed charters and the related revenue days for the three months and
fiscal year ended December 31, 2016 and the comparable periods of 2015.
Revenue days in the quarter ended December 31, 2016 totaled 2,167
compared with 2,098 in the prior year quarter. Revenue days in the
fiscal year ended December 31, 2016 totaled 8,658 compared with 8,311 in
the prior year. A summary fleet list by vessel class can be found later
in this press release.

Three Months Ended December 31, 2016

Three Months Ended December 31, 2015

Spot

Fixed

Total

Spot

Fixed

Total

U.S. Flag

Jones Act Handysize Product Carriers

Average TCE Rate

$29,742

$65,060

$ —

$64,193

Number of Revenue Days

92

972

1,064

—

1,082

1,082

Non-Jones Act Handysize Product Carriers

Average TCE Rate

$24,311

$9,628

$34,704

$16,630

Number of Revenue Days

147

37

184

146

38

184

ATBs

Average TCE Rate

$ 26,473

$32,029

$ —

$38,216

Number of Revenue Days

83

652

735

—

665

665

Lightering

Average TCE Rate

$91,052

$ —

$83,320

$ —

Number of Revenue Days

184

—

184

167

—

167

Total U.S. Flag Revenue Days

506

1,661

2,167

313

1,785

2,098

Fiscal Year Ended December 31, 2016

Fiscal Year Ended December 31, 2015

Spot

Fixed

Total

Spot

Fixed

Total

U.S. Flag

Jones Act Handysize Product Carriers

Average TCE Rate

$ 27,989

$64,919

$ —

$64,350

Number of Revenue Days

208

4,103

4,311

—

4,260

4,260

Non-Jones Act Handysize Product Carriers

Average TCE Rate

$31,422

$16,141

$29,453

$15,958

Number of Revenue Days

544

186

730

535

164

699

ATBs

Average TCE Rate

$ 26,473

$35,269

$ —

$38,605

Number of Revenue Days

83

2,802

2,885

—

2,700

2,700

Lightering

Average TCE Rate

$72,271

$ —

$79,209

$ —

Number of Revenue Days

732

—

732

652

—

652

Total U.S. Flag Revenue Days

1,567

7,091

8,658

1,187

7,124

8,311

Fleet Information

As of December 31, 2016, OSG’s owned and operated fleet totaled 24 U.S.
Flag vessels (14 vessels owned and 10 chartered-in). Vessels
chartered-in are Bareboat Charters. The Company’s fleet list excludes
vessels chartered-in where the duration of the charter was one year or
less at inception.

Vessels Owned

Vessels Chartered-in

Total at December 31, 2016

Vessel Type

Number

Weighted byOwnership

Number

Weighted byOwnership

TotalVessels

VesselsWeighted byOwnership

Total Dwt

Operating Fleet

Handysize Product Carriers 1

4

4.0

10

10.0

14

14.0

664,490

Clean ATBs

8

8.0

—

—

8

8.0

226,064

Lightering ATBs

2

2.0

—

—

2

2.0

91,112

Total U.S. Flag Operating Fleet

14

14.0

10

10.0

24

24.0

981,666

1Includes two owned shuttle tankers, one chartered in
shuttle tanker and two owned U.S. Flag Product Carriers that trade
internationally.

Reconciliation to Non-GAAP Financial Information

The Company believes that, in addition to conventional measures prepared
in accordance with GAAP, the following non-GAAP measures may provide
certain investors with additional information that will better enable
them to evaluate the Company’s performance. Accordingly, these non-GAAP
measures are intended to provide supplemental information, and should
not be considered in isolation or as a substitute for measures of
performance prepared with GAAP.

(A) Time Charter Equivalent (TCE) Revenues

Consistent with general practice in the shipping industry, the Company
uses TCE revenues, which represents shipping revenues less voyage
expenses, as a measure to compare revenue generated from a voyage
charter to revenue generated from a time charter. Time charter
equivalent revenues, a non-GAAP measure, provides additional meaningful
information in conjunction with shipping revenues, the most directly
comparable GAAP measure, because it assists Company management in making
decisions regarding the deployment and use of its vessels and in
evaluating their financial performance. Reconciliation of TCE revenues
of the segments to shipping revenues as reported in the consolidated
statements of operations follow:

Three Months Ended December 31,

Fiscal Year Ended December 31,

($ in thousands)

2016

2015

2016

2015

TCE revenues

$109,557

$114,560

$446,160

$449,058

Add: Voyage Expenses

5,219

4,194

16,260

17,814

Shipping revenues

$114,776

$ 118,754

$462,420

$466,872

(B) EBITDA and Adjusted EBITDA

EBITDA represents net (loss)/income from continuing operations before
interest expense, income taxes and depreciation and amortization
expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of
certain items that we do not consider indicative of our ongoing
operating performance. EBITDA and Adjusted EBITDA do not represent, and
should not be a substitute for, net (loss)/income or cash flows from
operations as determined in accordance with GAAP. Some of the
limitations are: (i) EBITDA and Adjusted EBITDA do not reflect our cash
expenditures, or future requirements for capital expenditures or
contractual commitments; (ii) EBITDA and Adjusted EBITDA do not reflect
changes in, or cash requirements for, our working capital needs; and
(iii) EBITDA and Adjusted EBITDA do not reflect the significant interest
expense, or the cash requirements necessary to service interest or
principal payments, on our debt. While EBITDA and Adjusted EBITDA are
frequently used as a measure of operating results and performance,
neither of them is necessarily comparable to other similarly titled
captions of other companies due to differences in methods of
calculation. The following table reconciles net income/(loss) from
continuing operations as reflected in the consolidated statements of
operations, to EBITDA and Adjusted EBITDA: